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In Episode 70 of Hull on Estates, Paul and Sean discuss Court approval of settlements affecting the interests of minors. They refer to Rule 7.02 and 7.08 fo Ontario's Rules of Civil Procedure as well as the case of Marcoccia (Litigation Guardian of) v. Gill, 2007 CarswellOnt 15 (Ont.S.C.J.).
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Litigation Involving Minors - Hull on Estates Podcast #70
Posted on July 31st, 2007 by Hull & Hull LLP
Sean Graham: Good morning. It’s Tuesday, July 31st, 2007 and you’re listening to Episode 70 of Hull on Estates.
Welcome to Hull on Estates, a series of podcasts for the Canadian legal community dealing with issues and insights surrounding estate planning in Canada. Hosted by the lawyers of Hull & Hull, the podcast will touch on some key considerations when planning estates and Wills. Now, here are today’s hosts.
Paul Trudelle: Hello Sean.
Sean Graham: Morning Paul, how are you?
Paul Trudelle: Very good thanks. 0Today we thought we would talk about the approval of infant settlements in the context of litigation involving minors and what is required in order to settle a case that involves a minor.
Sean Graham: Yeah, and just to put it in context, it’s an interesting proceeding because often what has happened is that you’ll be dealing with a family, generally in which a minor has been injured, sometimes quite badly. And they will then have been through a very difficult litigation proceeding against insurance companies. And once they’ve settled that litigation, they figure thank goodness, the ordeal is over, we can get on with our lives. However, they need court approval of that settlement. And the court approval is not a rubber stamp, and so that can cause a lot of dismay.
Paul Trudelle: That’s true. Nothing is ever easy in litigation. So with the scenario that you put forward, the car accident involving a minor, the minor is hurt, the minor brings a claim for damages. How is that claim prosecuted on behalf of the minor?
Sean Graham: Well the first step is that a litigation guardian needs to be appointed to protect and prosecute the interests of the minor who cannot do it him or herself.
Paul Trudelle: Right, and the provision for that is Rule 7.02 of the Rules of Civil Procedure that deals with litigation guardians for plaintiffs. And the procedure there for appointing a litigation guardian is quite simple and straight forward, I understand.
Sean Graham: Yeah. You have to present the court with an Affidavit which covers off certain grounds. And the court appointment can be sought. But the more simple way to go is to file an Affidavit saying that first: you consent to act as litigation guardian; secondly, that you’ve given written authority to a named lawyer to act on your behalf; thirdly, you have to provide evidence concerning the nature and extent of the disability. And for a child, it might simply be that the person is a minor. But often the accident will have caused more profound disabilities. You have to, for a minor, you have to simply state the minor’s birth date, whether the minor or person under disability is ordinarily resident in Toronto, setting out the relationship to the person under disability, and with minors, you’re often dealing with a parent, stating that there’s no interest of the litigation guardian opposing the interests of the child. And finally, acknowledging that you’ve been informed of your liability to pay personally any costs awarded against the litigation guardian or against the minor.
Paul Trudelle: That’s right. And that’s all from Rule 7.02 which sets out, in effect, a checklist. If your Affidavit hits all of those points, then that Affidavit gets filed with the court when the claim is commenced. And you’re off and running as litigation guardian. No formal order is required.
Sean Graham: Exactly. So it’s a fairly simple proceeding. And then the defendants can deal with you, knowing that you actually have authority.
Paul Trudelle: So you’re off and running, you’re going through your litigation, the minor is acting, or represented by a litigation guardian. Now, can the litigation guardian enter into a settlement on behalf of the minor?
Sean Graham: Yes, with a pretty huge caveat. You can enter into a settlement, but the settlement cannot be enforced unless you get court approval of the settlement. So for all practical purposes, you’re going to need court approval of that settlement.
Paul Trudelle: So what the parties would normally do in those cases is settle the case, subject to court approval of the settlement on behalf of the minors. And failing that, the settlement isn’t binding on the minors. And any defendant wouldn’t settle on that basis without court approval because it’s not binding and it leaves the defendant open to litigation once the minor comes of age.
Sean Graham: For sure, and the thought is generally that the lawyer advising on the settlement has done a good job, the litigation guardian has done a good a job. And the thought tends to be that no problem, we’ll get that approval, it’s just a rubber stamp motion. That is true in some cases but it’s a dangerous assumption because the courts, I’ve found, are becoming more and more alert to these settlements. And more and more are serving as sort of an auditor function to make sure, as a last barrier to protect the minor, that the settlement is in fact in minor’s interest.
Paul Trudelle: So what is the procedure for getting the motion to approve the settlement before the court, to get the court to look at the settlement, to consider it and say “yes, this is a valid settlement” or “no it’s not?” And then we’ll talk about what happens if the court rejects the settlement.
Sean Graham: Well you bring a motion under Rule 7.08 of the Ontario Rules of Civil Procedure. And it’s a motion. You can bring an application…
Paul Trudelle: I think you bring an application if there has been no action started, so…
Sean Graham: That’s right.
Paul Trudelle: If you’re at…if you were able to negotiate a settlement before any claim is even started, any defendant or any payor in that circumstance, would want court approval. So in that case, you’d start a separate application. Normally, however, there’s an action already started, so you bring a motion in that action.
Sean Graham: Yeah exactly, thanks Paul. And the materials you have to file in support of your motion or application is an Affidavit of the litigation guardian setting out the material facts and the reasons supporting the settlement and the position of the litigation guardian in respect to the settlement which is, of course, that the litigation guardian agrees with it. You also need, though, and this is kind of an interesting one, you need an Affidavit of the lawyer who acted for the litigation guardian, setting out the lawyer’s position in respect of the settlement. And then you need the minor’s consent in writing if the minor is between the age of sixteen and the age of majority, eighteen, unless the judge orders otherwise. And then finally, of course, you actually need a copy of the Minutes of Settlement.
Paul Trudelle: So with those materials, I understand preparing those materials can often be a difficult or a bit of a fine line that you have to walk down because you need to put some evidence before the court to say that the settlement is reasonable. But you want to be careful not to tip your hand too much. You can’t go in with an Affidavit saying wow, I can’t believe the defendant settled this on the basis that they did. It’s a great settlement because we had no case. So you’ve got to be very careful in preparing your materials there. How do the courts deal with the Affidavit materials that you’re able to put before it?
Sean Graham: I think it’s a really tough one. Especially, I mean, you need an Affidavit from the lawyer. So, in essence, an Affidavit from a lawyer which does not at least imply what the legal advice was, is a useless, in my view, Affidavit. It’s not helpful to the court. So the lawyer is put in a very difficult position because you obviously don’t want to disclose privilege or breach confidentiality, disclose privileged information or breach confidentiality. But by the same token, you have to swear an Affidavit. So again, you’re put in a very difficult position of either just doing a sort of a pablum Affidavit with a bunch of motherhood statements which don’t really mean very much to the court, which I don’t think can have been the intention when the Rule was drafted. Or setting out what your legal advice was and why. I think it’s a very difficult problem.
Paul Trudelle: Probably one of the best ways to address that is to either put all of that information in and ask for an order that the motion be sealed if that’s possible. Otherwise it may be just enough for the lawyer to say that in my experience, in my considered opinion, the reason the settlement is reasonable and set out some of the basis upon which the settlement was entered into.
Sean Graham: For sure. I just, you know, to me it’s, you wouldn’t be before court unless that was the case. So, you know, because they wouldn’t have settled. So, I suspect that there will be some changes relatively quickly to resolve this theoretical…I view it as a bit of a deadlock. I think it’s a great Rule because the court should be involved in these things, should be a protection to the minor. But by the same token, there needs to be some protections for the lawyer and the litigation guardian in terms of what happens if the court doesn’t approve the settlement? Then you’ve got all this material before the court in terms of the weaknesses in the minor’s case. And that cannot have been the intent either.
Paul Trudelle: That is a difficult issue. Another difficult issue is that the lawyer normally has to put in some information with respect to his or her fees. The settlement often calls for a payment of fees of some sort to the lawyer and that will require court approval as well. So there must be some information there with respect to the fees and the reasonableness of those.
Sean Graham: No question. And so you’ve got the lawyer being advocate for the client in terms of pushing this settlement through. But at the same time. lawyers want to get paid as much as any service provider. And so you, at the same time, you’re advocating for yourself as to why your fees are valid. And the question I always have is what happens if the court agrees with the settlement but not the fees? Do you have a settlement? And if not what, what happens then? I think that’s another tough, tough sort of nut to crack.
Paul Trudelle: Difficult issues indeed. Now if the court does approve the settlement and the funds are payable to the minor, is that the end of it? The cheque is written to the minor and he’s off to the races, or the racetrack.
Sean Graham: No, it never seems to be over. The next step then, and this sometimes can happen all at once, is a guardianship application. And it’s most often the litigation guardian also wants to become the guardian of property of the minor and that’s a whole other proceeding.
Paul Trudelle: And I think that’s often a bit of a shock to the parents of the minor. The parents can’t presume and it’s not the case that they’re automatically the guardians for property of the minor. A separate application is required for the parents to be appointed as the guardian. Now that procedure, I understand, can be brought as a separate guardianship application or can possibly be brought in the context of the action before the court?
Sean Graham: Yeah. There’s a recent decision on this actually, and it’s quite a lengthy and well considered decision by Justice Wilkins. It’s the Marcoccia decision. And we’ll put that in the show notes. But Justice Wilkins goes through a lot of issues at length. And is of the very strong view that in fact all these things should be brought at once because they’re all, all the facts obviously are related and there’s going to be a lot of duplication if you bring the motion for court approval and then the application for guardianship. And so Justice Wilkins was of the view that it should all be done at the same time wherever possible. And, you know, to keep the legal fees down and don’t have duplication and so forth.
Paul Trudelle: I also think that the judge considering the motion to approve the settlement has all of the information needed or a lot of the information that would be considered in determining whether the guardianship plan is appropriate as well.
Sean Graham: Yeah. And what in practical terms it does is the children’s lawyer generally is on notice of the motion to approve the settlement but is definitely on notice of the guardianship application. So if the children’s lawyer has not been brought in on the motion to approve settlement, and it’s certainly my practice to bring them in anyway, but if they’re not brought in on that, they’re going to be brought on the guardianship application. So you’ll be dealing with another party.
Paul Trudelle: We should talk a bit about that in the notice when you move to approve a settlement. The Rules don’t expressly require the children’s lawyer be put on notice. It’s the Rule directs that the court, if it sees fit, can direct that the children’s lawyer be served. I think the best practice, however, is to serve the children’s lawyer with the materials at for instance.
Sean Graham: I think so too because the majority of the time, if you haven’t, the court is going to ask you to do it anyway. And then you go to court twice when, you know, you might not have needed to so. I think the approach of the children’s lawyer to these things might actually be worth another podcast.
Paul Trudelle: I think so. And I think the guardianship for property of minors merits its own podcast as well. So maybe we’ll wrap up at this point. Just before we do, another procedure short of applying for guardianship for property of the minor is simply to have the funds paid into court.
Sean Graham: Yeah. And that is maybe a lot more efficient. The problem is you lose control if you’re the parent of the child. And the child him or herself, you know, may want their parents making a lot of these decisions. And so you may lose the sort of investment advice that you would normally get under a guardianship and so on. But it’s definitely a quick way to do it.
Paul Trudelle: I think that’s very helpful Sean, thank you very much.
Sean Graham: Thank you Paul.
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